Penalty could reach as high as 10% of annual revenue, which was more than $90 billion in 2016

BRUSSELS—European Union regulators in the coming weeks are set to hit Alphabet Inc.’s Google with a record fine for manipulating its search results to favor its own comparison-shopping service, according to people familiar with the matter.

The antitrust penalty against Google is expected to top the EU’s previous record fine levied on a company...